Correlation Between Intchains Group and Nano Labs
Can any of the company-specific risk be diversified away by investing in both Intchains Group and Nano Labs at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Intchains Group and Nano Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intchains Group Limited and Nano Labs, you can compare the effects of market volatilities on Intchains Group and Nano Labs and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Intchains Group with a short position of Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intchains Group and Nano Labs.
Diversification Opportunities for Intchains Group and Nano Labs
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intchains and Nano is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs and Intchains Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Intchains Group Limited are associated (or correlated) with Nano Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Labs has no effect on the direction of Intchains Group i.e., Intchains Group and Nano Labs go up and down completely randomly.
Pair Corralation between Intchains Group and Nano Labs
Considering the 90-day investment horizon Intchains Group is expected to generate 234.14 times less return on investment than Nano Labs. But when comparing it to its historical volatility, Intchains Group Limited is 16.42 times less risky than Nano Labs. It trades about 0.01 of its potential returns per unit of risk. Nano Labs is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 610.00 in Nano Labs on August 26, 2024 and sell it today you would earn a total of 216.00 from holding Nano Labs or generate 35.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intchains Group Limited vs. Nano Labs
Performance |
| Timeline |
| Intchains Group |
| Nano Labs |
Intchains Group and Nano Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intchains Group and Nano Labs
The main advantage of trading using opposite Intchains Group and Nano Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intchains Group position performs unexpectedly, Nano Labs can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nano Labs will offset losses from the drop in Nano Labs' long position.The idea behind Intchains Group Limited and Nano Labs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nano Labs vs. SEALSQ Corp | Nano Labs vs. GSI Technology | Nano Labs vs. SemiLEDS | Nano Labs vs. ChipMOS Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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